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Trying to stay upbeat? Avoid the business section. Unemployment stands at 9.1 percent. Growth is narcoleptic. The housing market hasn’t hit bottom. Fears of a Greek default are roiling markets. The deficit is running more than a trillion dollars for the third year in a row and won’t be shrinking anytime soon. A U.S. fiscal crisis may be only a few years (or months) away. President Obama, meanwhile, seems to think our problems would be solved if only we banned ATMs and built solar-powered bullet trains. His “propellerheads”—Geithner, Bernanke, Sperling, et al.—are spinning to the ground. Alert the authorities: Stop these men before they stimulate again.

The Republican presidential candidates have a powerful case to make against the Obama economy. A year ago, on June 17, 2010, the White House kicked off “Recovery Summer” by sending Joe Biden to home weatherization sites across the country. The headline for Timothy Geithner’s August 2, 2010, New York Times op-ed was “Welcome to the Recovery.” Geithner, it turns out, was about as honest with readers as he was with the IRS.

Normally, America goes into overdrive as it exits a recession. This time we’ve been limping along. Why? Because the president is more concerned with tax-and-spend politics than aligning incentives to promote innovation, productivity, efficiency, and debt reduction. Obama’s stimulus failed on its own terms, his health care plan hangs like a sword of Damocles over small business, and his regulatory agencies—from the EPA to the NLRB to the Federal Reserve to the Consumer Financial Protection Bureau—have become economic uncertainty machines.

More by Matthew Continetti

The president’s one good decision was agreeing to maintain current tax rates through December 2012. But he undercut his own policy by immediately pledging to raise taxes on incomes, dividends, capital gains, and estates at the first opportunity. Now it’s left to Republicans not only to prevent a major tax increase, but to remove, repair, and mend the fiscal and monetary damage left in Obama’s wake. The job won’t be easy.

The worst thing Republican presidential candidates could do is be timid and uninspired in their proposals for American renewal. Rather than pledge to lower the corporate tax, for example—big corporations actually seem to be doing pretty well—they’d be better off aligning themselves with small businessmen, many of whom file as individuals, and other entrepreneurs and venture capitalists. Researchers at the Kauffman Foundation have long pointed out that most net job creation in the United States comes from firms less than five years old. Why not embrace policies such as reform of the individual tax code, permanent cuts in payroll taxes paid by employers, and reductions in bureaucratic red tape that make it easier to start a company? Reducing inefficient tax breaks could be the trade-off for substantial increases in the child tax credit. The GOP would be on the side of startups and young families. Obama would be left in the cold.

Energy is another issue on which Republicans can’t afford to flinch. Economic upswings have tended to occur during periods of cheap and plentiful energy. So any true recovery would be encouraged by policies that increase the supply of fuel. For starters, there’s Rep. Devin Nunes of California’s Roadmap for America’s Energy Future. The Nunes plan expands production, opens new areas for drilling and exploration, and creates an innovative reverse-auction that would award grants to alternative energy producers on the basis of merit, not connections. A winning GOP candidate would marry Nunes’s Roadmap to a deregulatory agenda that got tough on the EPA, expedited leases for oil and natural gas, and eliminated barriers to hydraulic fracturing for oil shale. The greens would be angry, for sure. They’d also lose.

Congressional Republicans displayed courage by embracing the fiscal reforms contained in Paul Ryan’s budget. Similar boldness on other long-term challenges, like education, would elevate the discussion and demonstrate the seriousness with which conservatives face the future. Going after the unions isn’t enough. A radical expansion of home-schooling opportunities that took advantage of new technologies, for instance, would jolt the system and rally a growing political constituency. Funding students and not schools would be a similar disruption to the status quo. And a renewed interest in the moral and civic dimensions of education is necessary when young people exhibit a dreadful ignorance of U.S. history.

For the past two and a half years, the country has been trapped in an extended master’s class on the failures of liberalism. The way out is a Republican victory in 2012. Getting there will take imagination, bravery, authenticity, and the ability to connect with the people against the elites. The candidate who can do that will give us all reason to begin to smile again.